Gilead Sciences Stock Spikes After Q4 Results: Time to Buy?

Biotech leader Gilead Sciences GILD made headlines on Wednesday, with its stock spiking nearly 6% after delivering favorable Q4 results yesterday evening.

Thanks to its durable drug pipeline for HIV and liver disease, Gilead's stock has been on a captivating ascension in the last two years, producing gains of +100% and hitting an all-time high of $157 a share in today’s trading session.

Gilead’s Favorable Q4 results

Gilead posted Q4 sales of $7.92 billion, a 5% increase from $7.56 billion in the comparative quarter and topping estimates of $7.57 billion. HIV franchise sales grew 6%, driven by strong demand for prevention and treatment products like Biktarvy and Descovy, with liver disease revenue rising 17%, led by Livdelzi.

Net income for the quarter came in at $2.2 billion or adjusted EPS of $1.86, edging expectations of $1.83 despite a decline from $1.90 per share a year ago.

Full Year Results & Guidance

The spark behind Gilead’s post-earnings rally was that FY25 EPS spiked 76% to $8.15 compared to $4.62 per share in 2024. Furthermore, annual sales increased over 2% to $29.44 billion.

Offering full-year guidance for FY26, Gilead expects annual sales in a range of $29.6-$30 billion, which was slightly beneath Wall Street’s estimates of $30.04 billion or 2% growth. However, the top end of Gilead’s FY26 EPS Guidance ($8.45-$8.85) came in above the street’s expectations of $8.61 or 5% growth.

GILD is a Top Value Stock

Despite such an extensive rally, Gilead’s valuation may still be attracting investors at 17X forward earnings. Trading at a nice P/E discount to the benchmark S&P 500, this is also nicely beneath its Zacks Medical-Biomedical and Genetics Industry average of 19X forward earnings.

The pharmaceutical giant also offers a 2.15% annual dividend yield as opposed to the S&P 500’s 1.07% average, while many of its industry peers don’t offer a payout.

Gilead’s Intriguing ROIC

What may be most compelling to investors is that Gilead has shown a nice ability to turn invested capital into profits, one of the clearest indicators of long-term shareholder value.

With the admirable level being 20% or higher, Gilead’s return on invested capital (ROIC) is currently at 24%. It’s noteworthy that many other biopharmaceutical companies have an ROIC percentage closer to the mid-teens or single digits because of the immense R&D investment that is required.

Bottom Line

Following favorable Q4 results, Gilead Sciences' stock currently lands a Zacks Rank #3 (Hold). GILD is certainly an intriguing option for long-term investors looking for value and income in the portfolio. That said, the plausibility of higher highs for GILD will likely depend on what is hopefully a sharper uptick in FY26 EPS revisions.  

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This article originally published on Zacks Investment Research (zacks.com).

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